Joint letter on the Greening Corporate Fleets Initiative

Dear Commissioner Tzitzikostas,

On behalf of the Network for Sustainable Mobility¹, we would like to congratulate you on taking up your post as European Commissioner for Sustainable Transport and Tourism. We wish you every success over the next five years in a sector that is critical in enabling European competitiveness, growth and jobs.

We are concerned to learn that the “Greening of Corporate Fleet” initiative will now take the form of a legislative proposal. We understand that the public consultation run by your Services in DG MOVE during the first half of this year, which many of the Network members participated in, produced inconclusive results as to the need for a regulatory intervention. There is no clearly identified market failure, nor a proven case that regulation will accelerate greening.

In fact, we believe that a regulatory proposal as promoted by some stakeholders in Brussels – via mandatory BEV purchase targets for corporate fleets – is likely to slow greening and is in contradiction with the market-driven principles of the EU and the technology neutral approach for vehicles that President von der Leyen set out very clearly in her Political Guidelines in July of this year.² Such mandates implicitly limit zero-emission vehicles (ZEVs) to purely battery electric vehicles (BEVs) and vehicles with hydrogen fuel cells (FCVs). Instead, the Greening of Corporate Fleets initiative should be guided by technology neutrality. It should also recognise the role of RED-compliant CO₂ neutral fuels³ in view of the planned targeted amendment of the CO₂ regulation for passenger cars and vans.

Moreover, BEV purchase mandates targets for corporate fleets will create market distortions and bring with it a multitude of unintended consequences. In particular, we fear that targets could artificially inflate or maintain high prices of BEVs. Mandates do nothing to address customer demand. Forcing fleet operators to buy expensive vehicles that they can neither sell nor lease to customers is financially harmful, and will further exacerbate the already damaging effects of the collapse in residual values of EVs throughout Europe. As a consequence, fleet operators would very likely refrain from buying new, more energy-efficient, vehicles, while retaining older vehicles for longer – the precise opposite outcome to that which the Commission intends. By shrinking their fleets, mobility options for Europe’s citizens, businesses and public authorities will be reduced, at a time when good affordable mobility is central to economic growth. Some fleet operators, rather than choosing to shrink their fleets, may instead opt to purchase cheaper – imported – zero emission vehicles, thereby further undermining both the competitive position of European vehicle manufacturers and the fleet decarbonisation given the higher carbon production footprint.

Last but not least, the light- nor the heavy-duty vehicle segment has neither the required zero-emissions vehicles available nor the necessary enabling conditions for an accelerated uptake – recharging & refuelling infrastructure, grid capacity, service capacity etc. This jeopardises the existence of transport companies and would threaten logistics and supply-chains. To truly help the competitiveness of the EU automotive industry and the wider ecosystem we strongly urge you to focus on a holistic mix of proven policies and incentives. This includes putting in place the necessary enabling conditions, such as the swift build-up of alternative recharging and refuelling infrastructure, the development of a framework for the upgrade of the EU electricity grid, as well as developing a robust EU industrial action plan for the automotive sector. In addition, we suggest recommending Member States to put in place fiscal incentives that will increase access to and the affordability of all zero-emissions vehicle technologies, including the combustion of renewable and low carbon fuels (both e-fuels and sustainable biofuels). These are the measures that will accelerate the greening of corporate fleets on an environmentally, economically and socially sustainable basis.

We hope you will take into consideration our concerns and focus on viable and effective measures not those that are superficially attractive but highly damaging in practice and would also be interested in a meeting with you to discuss this crucial topic in further detail.

We remain at your disposal for direct dialogue on these issues and any follow-up questions you may have.

Kind regards,
The undersigned associations

¹ The Network for Sustainable Mobility is a voluntary and informal gathering of stakeholders along the value chain representing the transport, engineering, fuel manufacturing and energy sectors supporting the role of sustainable renewable fuels in a climate-neutral road transport system.
² “For instance, the 2035 climate neutrality target for cars creates predictability for investors and manufacturers. Getting there will require a technology-neutral approach.” POLITICAL GUIDELINES FOR THE NEXT EUROPEAN COMMISSION, 2024−2029, page 9.
³ CO₂ neutral fuel' means all fuels defined by the Renewable Energy Directive (EU) 2018/2001, provided that they meet the sustainability criteria of that Directive and associated delegated acts, where the same amount of CO2 from biomass, ambient air or recycled carbon sources is bound in the fuel production as is released during combustion in the use phase. Those fuels shall include renewable and/or synthetic fuels, such as biofuel, biogas, biomass fuel, renewable liquid and gaseous transport fuel of non- biological origin (RFNBO) or a recycled carbon fuel (RCF).